Wednesday, 11 July 2012

Why do trustee boards matter?

Art in Healthcare are pleased to have our first guest blogger this week!
Gavin McEwan is a well-established charity lawyer and dedicated member of Art in Healthcare's board. Gavin writes about the importance of a strong, involved board for a charity.

One of the things we take seriously at Art in Healthcare is the people who make up our board of trustees. Indeed, the composition of trustee boards is a hot topic for charities across Scotland and beyond, keen to build on the principles of good governance. So why do trustee boards matter so much?

It may be helpful to take a step back and to understand what trustee boards are for. In most charities, other than the very smallest, day to day work is frequently carried out by paid employees or volunteers or a combination of both. Trustees are often not involved in that day to day work in a hands-on way. But it would be a mistake to assume that the trustees have no role to play.

Charity law provides that the trustees are responsible for the control and management of the charity’s affairs – so if something goes wrong, the buck generally stops with the trustees. In some cases, the trustees can be personally liable for mistakes made, and have to pay out of their own personal pockets in order to make good any costs or losses. Trustees therefore have real responsibility for overseeing the strategic development and operation of a charity and they carry a number of important legal duties.

Given the responsibility which trustees bear, it is critical that a trustee board has the right mix of skills and expertise to ensure that their charity is managed to best effect. Getting the board structure right can be a tricky process and needs care and attention. In my “day job” as a charity lawyer, I meet clients every week who are concerned about their governance structures and whether their trustees fully understand their legal duties and the responsibilities and risks which they carry. A large part of my job is to advise charities which board structure is best for them, and to train boards of trustees to help them get it right.

Can things really go wrong if the board doesn’t contain the right people? The answer, unfortunately, is yes. A number of charities have made the newspapers in Scotland over the years because there was some problem with their board structure, or because the trustees had not performed their duties properly. That not only creates negative publicity and the risk of investigation and penalties from charity regulators: it can also expose trustees and charities to financial loss, endangering vital project work, and affecting relationships with funders and other stakeholders, sometimes irreparably.

At Art in Healthcare, we take some care in selecting the trustees who serve on our board. We look at gaps in our skills base and we identify people who can help to fill the gaps. In the end, what we are constantly working towards is a board of trustees with a wide range of knowledge and experience to help Art in Healthcare move forward successfully, tackling any problems that arise on the way. You could say that we are creating a collage of complementary trustees: perhaps that’s not a bad analogy for an art charity!

Gavin McEwan is a charity law partner at Turcan Connell and is the Vice-Chair of Art in Healthcare. He is accredited by the Law Society of Scotland as a Specialist in Charity Law.

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